By Edward W. WalkerExecutive Director, Berkeley Program in Soviet and Post-Soviet Studies, University of California, Berkeley.

On February 6, 1998, Levon Ter-Petrossian resigned as president of Armenia. On the face of it, his resignation was entirely constitutional. The president has a right to resign, at which point the presidency passes to the chairman of the National Assembly, Armenia's parliament. If the leader of parliament is unable to perform those duties, the prime minister becomes acting president. In this instance, the National Assembly voted to accept not only Ter-Petrossian's resignation but also the resignation of its chairman, Babken Ararktsyan, a Ter-Petrossian ally. As a result, Armenia's prime minister, Robert Kocharian, became acting president.

Presidential elections were then scheduled for March 16, well within the constitutionally specified time period of two months. When no candidate received a majority of votes in the March 16 elections, a runoff was scheduled for March 31 between the two leading vote-getters, acting-President Kocharian, who received 38 percent of the first round vote, and Karen Demirchian, a former Communist Party First Secretary of Armenia who received 32 percent. Kocharian won the runoff with approximately 60 percent of the vote.

On closer inspection, however the constitutionality of these events is questionable. In his resignation speech, Ter-Petrossian explained that "well-known bodies of power demanded my resignation. Taking into account the fact that the fulfillment of the president's constitutional duties under the current situation is fraught with a real danger of destabilization in the country, I accept that demand and announce my resignation." He then called upon the Armenian people to "display restraint." In effect, Ter-Petrossian was using less-than-Aesopian language to indicate that he could no longer exercise his constitutional power, particularly the right to fire his prime minister.

Beginning in late 1997, Kocharian had begun openly opposing Ter-Petrossianís decision to accept an OSCE proposal for a first stage settlement of the conflict over Nagorno-Karabakh, a former autonomous republic within Azerbaijan in the Soviet period that has been attempting to win its independence from the Azerbaijan since 1998. Kocharian, either explicitly or implicitly, made clear to Ter-Petrossian that he would not resign if the president attempted to remove him from office, and that he had the support of the key "power ministries." Rather than risk a violent clash that he doubtless would have lost, Ter-Petrossian therefore agreed to step down.

Armenia's one-time reputation as the most successful democratizer and economic reformer in the CIS was dealt another blow by this palace revolt. It had already suffered from Ter-Petrossianís earlier backdown on an important opposition party and by tainted parliamentary elections in 1995 and presidential elections in 1996. The weakness of the rule of law in Armenia was further highlighted when Armenia's Central Electoral Commission decided to allow Kocharian to run for president, despite the fact that he is not formally an Armenian citizen (he was president of Nagorno-Karabakh, until Ter-Petrossian appointed him Armenian prime minister) and had not fulfilled the residency requirements required by the constitution. The convoluted legal reasoning was that Karabakh, which now considers itself an independent state whose citizens technically do not have a right to vote in Armenian elections, had at one point declared a union with Armenia.

Then, five of the candidates in the first round elections declared that the balloting had been unfair and tainted by fraud, an assessment that was confirmed by the head of the team of some 140 OSCE election observers in Armenia, who characterized the election as "deeply flawed." While OSCE was less critical of the runoff voting, election observers reported numerous violations, while Demirchian argued that the irregularities were serious enough to render the election invalid.

The conventional explanation for this dramatic turn of events is that Ter-Petrossian made a fatal error by caving in to pressure from the international community, particularly the United States, to make concessions over a Karabakh settlement. These concessions were rejected by the leadership and people of Karabakh, as well as by the Armenian electorate and political elite. In particular, there was said to be profound opposition to the Minsk Groupís "staged" approach to settlement, in which a withdrawal of Karabakh forces from most of the districts they now are occupying in Azerbaijan proper and various security arrangements would precede an agreement on Karabakh's legal status and relationship with Baku.

Moreover, pressure on Armenia from the international community supposedly reflected a "tilt" toward B aku because of Azerbaijan's enormous fossil fuel reserves.The supposed lesson of the resignation, then, was that outside actors have at best a limited ability to promote settlements of secessionist conflicts, because leaders who make compromises in response to external pressure lose the support of their constituencies. By implication, the Minsk co-chairs should never have put forward a substantive proposal, pressured Armenia to make concessions, or even gotten involved in the first place.

This conventional explanation is correct in one respectó Ter-Petrossianís willingness to accept the Minsk Groupís proposal "as a basis for negotiation" was indeed the critical issue that divided the president from his former allies. In other respects, however, the explanation is questionable at best. In the first place, the reaction of the Armenian and Karabakh electorates to the Minsk proposal is not known. Neither the Armenian nor Karabakh electorate had an opportunity to express its opinion on the proposal through a referendum. The participants in the Minsk process were precluded from making the terms of the proposal public prior to an agreement, and as a result neither electorate was fully apprised of the details of the proposal, particularly its security provisions.

Moreover, Ter-Petrossian had only endorsed the proposal as a "basis for negotiation," not as a final blueprint. And while Ter-Petrossian may have been very unpopular at the time of his resignation, it cannot be assumed that opposition to Ter-Petrossian meant opposition to the Minsk proposal.. Nor does increased external pressure appear to account for Ter-Petrossianís willingness to accept the Minsk proposal. In fact international pressure on Yerevan was no greater in 1997 than it had been in the past, and the Minsk Group co-chairs had been careful to discuss their proposal, which they first submitted in May 1996, with all three partiesó Baku Yerevan, and Stepanakert. They also did their best to respond to objections in a series of revisions.

Rather, Ter-Petrossian apparently concluded that the proposal, particularly its security provisions, was reasonable and that Armenia's economic recovery, and hence its long term security, depended upon a settlement. Armenia needs Turkey to open up its border and allow rail traffic to resume passage to Middle Eastern and European markets, but Ankara has made it clear that it will continue its blockade until there is a first stage settlement. Ter Petrossian may also have feared that Azerbaijan's economic performance and military prowess would begin to improve rapidly once oil profits start to flow into government coffers some four to five years hence.

Kocharian, his allies in the Ter-Petrossian administration, and the leadership in Stepanakert apparently disagreed. Instead, they seem to have concluded that Armenia's economic prospects, and hence Karabakh's as well, were reasonable even without a lifting of Turkey's embargo, that Armenia and Karabakh would be able to preserve their military advantage over Baku, that the Azeris lack the will and internal ability to retake Karabakh by force, that corruption is so rife in Azerbaijan that oil revenues will do nothing to improve Azerbaijan's military position, and that accordingly the security risk of withdrawing from the occupied district was not justified by the potential gain, particularly in view of the limited term of the mandate for the proposed OSCE peacekeeping force. They may also have calculated that once Azerbaijan's oil production facilities and pipelines are in place, these assets will be vulnerable in the event of renewed warfare, particularly because Azerbaijan's so-called Main Export Pipeline is very likely to run through Georgia, which will bring it close to the cease-fire line and the Armenian border.

In short, the disagreement was over different assessments of Armenia's and Karabakh's perceived interests, not whether it was appropriate to cave in to external pressure at the expense of those interests. The claim that the international community has been unfairly pressuring Armenia because it wants to sign oil contracts with Baku or that oil and only oil is dictating US policy in the region also does not bear close scrutiny. The Minsk Group was formed prior to the signing of the "deal of the century" in late 1994, which was when the policy-making community in Washington began to pay serious attention to the Caspian.

The reasons for this attention were numerous, but they included concern that Russia and Turkey, which is a NATO member, could be drawn into the conflict; the fact that Karabakh, unlike Abkhazia or South Ossetia, was not on Russiaís border and, unlike Crimea or Transdniestra, was not largely populated with ethnic Russians, which meant that the OSCE could offer its services without stepping on Russiaís toes; the political weight of the Armenian-American community and its interest in bringing an end to the violence; and the general desire in Washington to protect the sovereignty of the newly-emergent Soviet successor states and to promote stability and prosperity in the region. This is not to say that oil has not intensified Washington's interest in brokering an agreement or that oil companies have not been trying to influence US policy in the region. But the oil lobby has so far been unable to overcome the Armenian lobby's support for Section 907 restrictions on US aid to Azerbaijan, which suggests that Armenia is hardly being treated unfairly in Washington.

Azeri oil did, however, play an indirect role in Ter-Petrossian's resignation. Talk about a "peace pipeline" and the widespread belief in Armenia and Karabakh that Azeri oil accounts for the pressure on Armenia to compromise made Ter-Petrossian vulnerable to charges that he was "selling out" Karabakh for oil dollars, and Ter-Petrossian was not very effective in countering these charges. It also made Stepanakert more suspicious of the intentions of the international community and the Minsk co-chairs, and increased tensions between Stepanakert and Yerevan for the same reason. In this sense, the effort to use oil as an inducement to a settlement backfired, which suggests that Western officials should refrain from making public statements about the dire economic consequences for Armenia should it fail to compromise.

But the real lesson of Ter-Petrossian's resignation relates to the structure of the Minsk process. From its inception, Baku decided to treat the conflict as an interstate one, in which it was the victim of a war of aggression and subsequent occupation by a foreign power. Stepanakert, Baku insisted, was a mere puppet of Yerevan, and as a result Baku would deal directly only with Yerevan.

This had two advantages. First, it was psychologically easier for Azeris to accept their military defeat by stressing the role that Armenia played in the war (which was great indeed) as well as the role played by Russia, which is seen in Baku as a staunch ally of Armenia. Second, it meshed well with Bakuís strategy of pressuring Karabakh indirectly by isolating Armenia politically and economically. It would have been very difficult for Baku to pressure Karabakh directly because of the extent of Armenian support for the region.

Ironically, Azerbaijan's position also had advantages for Yerevan and Stepanakert. For the former, it helped legitimate its claim that it had a direct interest in Karabakh and that its strategic concerns needed to be accommodated in the negotiations. For Stepanakert, it helped institutionalize its relationship with Armenia, and it meant that Yerevan was responsible for conducting the negotiations, which allowed Stepanakert to sit back and see what happened without having to justify any concessions to the Karabakh electorate.

While this arrangement may have been the "least worst" option at the time the negotiations began, in the long run it probably created more problems than it solved. Certainly it was a primary factor in Ter- Petrossian's resignation because it created an almost impossible political dilemma for the Armenian president. In negotiating over Karabakh, Ter-Petrossian had to consider not only the position of Baku, but also the preferences of the Armenian electorate, the Armenian political elite, the Minsk co-chairs, the international community generally, Washington and Moscow particularly, and above all the leadership in Stepanakert and the Karabakh Armenians. This was an extraordinarily difficult challenge, and it is doubtful that Armenia's next president will be any better at meeting it than Ter-Petrossian.

Perhaps it would be best if he did not have to. Indeed, the arrangement may have outlived its usefulness, above all because it is no longer in Azerbaijanís interest. Azeri officials have already participated in negotiations at which Karabakh representatives were present, and Baku has reportedly agreed to treat Stepanakert formally as a "party to the conflict" in first stage negotiations.

Aliev would be well advised to go further than this however. He should state publicly that Baku considers the Karabakh conflict to be an internal affair that needs to be worked out between Baku and Stepanakert; that the government of Stepanakert genuinely represents the Karabakh Armenians; that Stepanakert is a party to the conflict in a way that Yerevan is not; that the Minsk process must continue but with direct participation by Stepanakert; that Armenia is interfering in Azerbaijan's internal affairs with its economic, military, and political support for Karabakh and its failure to close the Lachin road, which after all passes through what is legally Azeri territory; and that this Armenian interference means that until Baku and Stepanakert reach some kind of settlement, Turkey's blockade of Armenia must stay in place. Presumably, the prospect of the Main Export Line going through Turkey to Ceyhan gives Baku the leverage it needs to convince Ankara not to lift the embargo.

In taking this position, Baku would be adopting more less the same position that other governments in the Soviet successor states confronting secessionists have taken. In every other case (Abkhazia, South Ossetia, Chechnya, and Transdniestra, as well as in the former Yugoslavia, the only exception being the refusal of the Serbs to negotiate directly with the Albanians), the national government has been willing to carry out direct negotiations with the secessionists without preconditionsó in particular, they have not insisted that the secessionists accept the principle of territorial integrity before negotiating. It would be as if Tbilisi refused to talk to the Abkhaz before the former agreed that they were a part of Georgia, or insisted on negotiating a solution with Moscow only.

Were Baku to alter its position, the Minsk co-chairs would likely welcome the change. After all, direct talks are something that both Stepanakert and Yerevan have repeatedly demanded, although what their actual reaction would be is difficult to tell. Despite the fact that Azeri officials have met on occasion with representatives of the Karabakh Armenians and agreed to the designation of Stepanakert as a party to the conflict in first stage negotiations, the perception in Armenia and Karabakh is that Baku is dealing only with Yerevan and cutting Stepanakert out. If Baku wants an agreement (and it appears that it does), it should do its best to change that perception and enter into direct talks with Stepanakert.

This article originally appeared in Analysis of Current Events, March/April 1998, Volume 10, Nos. 3Ė4.